Finance Committee on April 20th, 2026

[Douglas Hoyes]

Yes, and I can tell you that we published the Hoyes Michalos homeowners bankruptcy index, which says that only 10% of my clients own a home at the time they file an insolvency. If you go back to 2011, it was more like one-third. I believe Ron Butler made the same comment earlier.

If you own a property and have owned it for the last five, 10 or 15 years, everything's good. If you've been a renter or have not had assets, you have not had that same asset growth, and you have therefore not been able to resort to refinancing to bridge the gap. There's absolutely a difference between homeowners and renters.

[Sandra Cobena, Conservative, Newmarket—Aurora, ON]

How much additional debt is not being displayed in the mainstream figures that we are seeing?

[Douglas Hoyes]

Well, we are dealing with, obviously, clients who are at the end of the road and file an insolvency. The average Canadian does not have $67,000 worth of unsecured debt, but that tells you where the tipping point is. When you get to that level, unless your income is really high, you have a problem.

[Sandra Cobena, Conservative, Newmarket—Aurora, ON]

What does this buy now pay later usage that we're seeing tell you, in terms of Canadians being able to afford their necessities?

[The Chair, Liberal, Karina Gould]

Unfortunately you're going to have to answer that at another time, because that concludes your time.

We will continue with Mr. Leitão now for five minutes.

[Carlos Leitão, Liberal, Marc-Aurèle-Fortin, QC]

Thank you very much, Madam Chair. I will be sharing my time with my colleague, Mr. Sawatzky.

I’d like to ask you a quick question, Mr. Bolduc.

You and your colleague, as well as other witnesses, have mentioned auto loans as a source of pressure. Could you tell us a little more about that? What’s the problem with auto loans?

[André Bolduc]

Yes. When you look at consumers' budgets, probably the second-highest expense after housing is car payments, along with the gas and the insurance. Sometimes it's a lot more than food, even. If you have a household with two cars, it gets compounded.

We've found that cars are more expensive. You used to finance cars over four or five years. Now, the average is seven years, and we see up to eight years. These are major lenders giving those rates. Payments are getting spread out more.

Also, we're seeing people trade in cars that are not fully paid off. Those get traded in at what's outstanding on the loan, not what the car is worth. When you get a new car, you're rolling in the shortfall on the other one, and now you're paying for two cars or a car and a half. I've also seen scenarios where there are two cars that were traded in. When we see them, the shortfall can be $20,000 to $30,000. Over time, those additional payments grind down on your budget, and that's money you can't spend elsewhere. That's the problem we're seeing there.

[Carlos Leitão, Liberal, Marc-Aurèle-Fortin, QC]

Indeed, yes. Eight years to repay an automobile is a little much. I agree with you.

I will cede my time to my colleague, Mr. Sawatzky, now. Thank you.

[Jake Sawatzky, Liberal, New Westminster—Burnaby—Maillardville, BC]

Thank you, Mr. Leitão.

I would also like to thank the witnesses for joining us today.

Ms. Pugliese, in your opening remarks, you mentioned that people often find themselves in debt following a life-altering event. Could you specify what types of events you observe most frequently and how they specifically lead to debt?

[Maude Pugliese]

The first situation is the need to care for children or family members. Very often, when a child is born, for example, taking parental leave reduces income, and then, when it’s time to return to work, if child care isn’t available, people often have no choice but to stay home longer. This was not planned at all; the child is at home and debts are piling up. This is a situation that has frequently been noted. In fact, in 14% of cases, debt is linked to the need to care for children or, at the other end of the spectrum, to a situation of caring for a family member. If a parent falls ill, once again, work hours must be reduced. Obviously, in this case, it is more often women who find themselves in this type of situation.

The second very common type of situation is job loss due to illness. This tends to affect men more.

Finally, the third scenario involves people with chronically low incomes, particularly those receiving social assistance. Often, a separation is also a factor in these cases. These are the three most common scenarios.

[Jake Sawatzky, Liberal, New Westminster—Burnaby—Maillardville, BC]

Thank you very much, Ms. Pugliese.

My next question is for Mr. Cowan.

I was having a look at your recent podcast, in which you talk about global changes. We've been hearing at times that explaining these is an excuse.

It's not necessarily an excuse. I think it's just important to consider the context.

I have about 50 seconds here. How would you explain how these economic shocks can affect consumer confidence?

[Wesley Cowan]

Clearly, right now we're experiencing this with respect to the conflict overseas and the impact on oil prices and, therefore, prices at the pump. We talked about the issue of car expenses. That's a big one for a lot of people—transporting themselves around to work and to things like that.

Generally, what we find too, certainly in my line of work, is that these external factors have a psychological impact on people. If they feel besieged by the debt they have already, they are even more likely to seek out a solution, like an insolvency proceeding, in order to solve the problems they have because of the impact of these external factors.

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Cowan.

Thank you, Mr. Sawatzky.

Mr. Garon for two and a half minutes.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Thank you, Madam Chair.

I'll continue with you, Professor Pugliese.

Are young people affected by excessive debt, and if so, how?

[Maude Pugliese]

Yes. They are affected in the sense that they are more likely to report having difficulty in repaying their debts. Obviously, in their case, part of that debt is related to increasingly costly education, which may not yield the same returns as in the past because of the difficulty in finding employment after graduation and stagnant wages, as has already been mentioned.

Another point worth noting about young people, beyond the fact that their income is significantly lower, is that they often report feeling uncomfortable asking questions at financial institutions and not feeling respected. So if we want to talk about consumer protection, financial literacy and that kind of thing, perhaps we should also find ways to help young people feel welcome in financial institutions and comfortable asking questions.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Quickly, because time is running out, I'd like to ask you a question that a Liberal colleague, who spent 20 years in the banking sector and isn't here today, has asked several times in other meetings: Is credit too easily accessible?

I'm asking you the same question, but with a particular focus on young people. Also, do they have the financial literacy needed to deal with that availability of credit?

[Maude Pugliese]

Is credit too easily accessible? I tend to agree with a comment that was made in the previous part of the meeting. I think having access to credit can be a good thing, because sometimes it's necessary, especially when you're young and need to invest in the future. It may be more a question of regulating rates.

Can financial literacy play a role? I think it certainly can.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Quickly, in 10 seconds, what most distinguishes the over-indebtedness situation of Quebeckers from that of the rest of Canada?

You have eight seconds.

[Maude Pugliese]

In Quebec, the data are somewhat dated, but Quebec is slightly less over-indebted than the rest of Canada. Why is that? That's a good question.

[The Chair, Liberal, Karina Gould]

Thank you, madam. Time is up.

We have about seven or eight minutes left. If the committee is in agreement, I will cut the remaining time in half and give four minutes to the Conservatives and four minutes to the Liberals.

[Some hon. members]

Agreed.

[The Chair, Liberal, Karina Gould]

Mr. Kelly, you have the floor for four minutes.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

Thank you.

Mr. Hoyes, you said that debt is not a new problem, that it's a lagging indicator, meaning that people get themselves into debt and that it takes many years before it lands at your office.

What do you make of testimony we heard earlier today about mortgage renewals? We heard that 70% of renewing mortgage customers are paying more than they were paying before, and that there is a record number of them. There are more mortgages maturing in 2026 than in any year in Canadian history. What does that say about the prospects for your business in the coming months and years?

[Douglas Hoyes]

Prospects are good. I will be increasingly busy, because, you're right, let's say I renew my mortgage today. The payment has gone up by $1,000 a month. That's no problem; I take some money from here and from there and make the payments, but if that happens month after month after month, which it does, eventually you hit the breaking point.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

That's right, and we've heard testimony affirmed by many witnesses at this committee that Canadians are not earning more. Their incomes are not going up. They are dealing with these higher costs. It's not just mortgage credit and not just housing but everything: food, gasoline and all the necessities of life are going up while their wages are not. They're dealing with it by skipping out on other expenses, exhausting their savings or refinancing. Eventually, this is not sustainable and, again, lands at your office. Is that fair to say?